East Anglia: Double boost as Manpower and RICS surveys point to strong growth in jobs and house prices
The East of England economy has received a double boost in the form of surveys forecasting strong growth in employment and house prices.
According to the latest Employ-ment Outlook survey by human resource firm Manpower, the region’s hiring intentions currently outpace any other part of the UK including those of London, which has been a jobs powerhouse throughout 2013, with an employment outlook of +11%, compared to a national outlook of +5%.
Meanwhile, market expectations for house price growth in the region hit an 11-year high last month, according to the Royal Institution of Chartered Surveyors (RICS).
The East’s jobs market enjoyed “a very strong showing” in 2013, said Manpower, with a consistently high outlook.
The survey is based on responses from 2,100 UK employers who are asked whether they intend to hire additional workers or reduce the size of their workforce in the coming quarter. It is used as a key economic statistic by both the Bank of England and the UK government.
The national Seasonally Adjusted Net Employment Outlook of +5%indicates that the jobs market is marginally down on the final quarter of 2013 when the Outlook was +6%.
London employment outlook peaked at +11% six months ago, but its hiring intentions have slumped well below the national average to just +1%.
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The regions, with the East of England in the forefront, are making up the shortfall, and for the first time in six years, every region of the UK is showing a positive outlook.
“2013 was a particularly strong year for the East which saw the region’s employers consistently looking to hire” said Manpower operations manager Jason Greaves,
“What is particularly encouraging is that this shows no signs of slowing down as we head into 2014. From speaking to our customers, we are noticing that it is the medium sized businesses in the area that are showing the most confidence when it comes to job creation, as opposed to the larger companies.”
Manpower said it had seen an uplift in commercial staffing.
“The East has consistently been the benchmark for the rest of the regions and, as jobs continue to be created, we can expect a rosy outlook well into 2014,” said Mr Greaves.
But Manpower believes that nationally, “a far more turbulent” jobs market exists below the waterline.
UK manufacturing grew from +3% last quarter to +6% this time round, its strongest outlook in more than two years. Another sector performing well is transport on +7%, with the rise of internet shopping making jobs in home delivery a popular choice particularly for part time workers and the utilities sector continues to show strong signs of hiring (+9%) as it has throughout the downturn.
Evidence of the two-paced jobs market is clear in finance and business services, the most buoyant sector this time round with a score of +11%.
While the banking sector is seeing job losses, there has also been a surge in the search for employees in the sector with IT skills. Data governance consultants and cloud security experts are hugely in demand, and able to command a daily rate of as much as £1000, said Manpower.
A further sign of the uncertainty in the jobs market is highlighted by the outlook for construction which remains depressed. The sector fell by a percentage point for the second quarter running and is firmly rooted in negative territory at -6%, contrary to other indicators which suggest that hiring proceeds apace.
Expectations for growth in house prices in the East of England hit their highest level for more than 11 years last month, according to the latest survey by industry body the Royal Institution of Chartered Surveyors (RICS) .
With the number of homes coming on the market in the region continuing to fall well short of fast-rising buyer demand, the net balance of chartered surveyors in the region who said they expected prices to continue their upward trend over those predicting a decline rose to 48%, the highest figure since June 2002.
Last month also saw prices pick up sharply, with a net balance of 54% more respondents in the East reporting price growth, up from 49% in October.
This trend was reflected across the country, with each UK region and national seeing prices rise for a second successive month.
RICS says that while prices in some local areas around the UK are still struggling, markets on a regional basis are now responding to the combination of incentives provided by the Government and better economic news.
The level of buyer interest in the East is also continuing to build, with a net balance of 46% more surveyors reporting an increase in new enquiries last month.
RICS says this represents a significant improvement compared with the same period last year when respondents in the region reported a negative net balance.
Looking ahead, with the economic recovery gaining some traction, predictions for the rate of increase in future transaction levels also remain in positive territory, with a net balance of 59% of surveyors in the region expecting sales levels to increase into the New Year.
However, a lack of stock coming on to the market remains a major challenge, says RICS, particularly with buyer interest in the region continuing to rise.
RICS East of England spokesman Jan Hÿtch said: “It’s no secret that the housing market is on the way up, with price and sales expectations on the rise across the region.
“The Bank of England’s recent decision to withdraw the Funding for Lending scheme, which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants, could well have some impact on the number of people able to purchase a home.
“Although the improvement in wholesale and retail funding markets may mean the impact on mortgages is relatively limited.One thing we are very concerned about, however, is the lack of both new and existing homes coming on to the market.
“As the Chancellor pointed out last week, housebuilding is on the up, but it is rising nowhere near quickly enough to make up the shortfall that has built up in recent years.
“If there is not meaningful increase in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards making the cost of shelter ever more unaffordable.”
Nationally, RICS says that a balance of 59% more surveyors predict that prices will rise rather than fall over the next three months. while the proportion predicting an increase in the volume of sales heading into 2013 reached a record level last month, with a net balance of 76% more surveyors expecting an increase ? the highest reading in records going back to 1998.